New Coverage Coming for Pre-Existing Conditions

Multiple sclerosis patient Marc Fladell and millions like him hope they will benefit when the first major piece of national health reform begins this month.

Fladell, 47, needs lots of treatment in his 18-year battle with multiple sclerosis, but he lost his job and then his extended health insurance ran out two years ago. No insurer will touch him because of his illness, leaving him to pay his own medical bills of $300-plus per month.

The MS lets the Pompano Beach attorney work only part-time, so he often skimps on or skips medical care. He stopped going to the doctor for pain in his limbs or torso; he just ices down and takes the pain. If he gets the flu or other symptoms, he may see a nurse at a drugstore. His costly MS drug comes free from a manufacturer charity program, but when he needs other drugs, he often goes without them.

Now Fladell is warily hopeful because the government on June 23 will start to roll out "high-risk pools" in each state offering guaranteed coverage to people with pre-existing conditions.

"I would love to have insurance. I would pay whatever I have to, although I can't afford too much," Fladell said. "I didn't ask for MS. MS chose me. I just want the same ability to get insurance as everyone else has."

Yet experts say the $5 billion program will cover only a fraction of those who need it, and the coverage will be expensive.

Moreover, if Florida's experience is any indicator, the cost could be prohibitive: The state's experiment with a high-risk pool in 1982 collapsed in less than a decade because of spiraling expenses.

Covering the uninsured was among the top priorities of the health reform law passed by President Obama and Congress, especially for those who have been refused coverage or charged huge premiums because they have cancer, heart disease or even conditions such as asthma.

The high-risk pool program is a temporary fix, lasting until the main part of health reform launches in 2014 with insurance exchanges that will offer guaranteed coverage for all and subsidies for many.

The temporary pools will be open to all those with pre-existing conditions who have been uninsured for at least six months. Insurers or public agencies selling policies in the pools cannot charge more than for a typical individual policy on the open market. That may cut premiums by half or more compared with policies available now, although the prices will likely vary widely.

The pools should be most helpful to people age 55 to 64 who are more likely to be ill and are too young for Medicare, said Sara R. Collins, of the non-profit health policy group the Commonwealth Fund.

The pools end "this costly and unfair practice that allowed insurance companies to cherry-pick the healthiest beneficiaries while denying coverage" or charging chronically ill people higher premiums, House Speaker Nancy Pelosi said this month.

But the coverage will not be ideal. The average family health policy in Florida is $1,200 a month. The pools need cover only 65 percent of medical costs. Patients will have to cover co-pays, although no more than $5,950 a year for an individual, $11,900 for a family under the new law.

Nor will it cover everyone. Congress set aside $5 billion to run the pools through 2013, of which $351 million goes to Florida. Experts on all sides agree that's a drop in the bucket compared to the need.

Of the 50 million uninsured Americans, about 7 million have pre-existing conditions and will be eligible for the program. A study for the National Institute for Health Care Reform found that the program will have enough money to cover about 200,000 of them.

In Florida, the program will be able to cover maybe 30,000 of an estimated 500,000 eligible people, said Jerry Ashford, executive director of the Florida Comprehensive Health Association, a tiny high-risk pool set up by the state.

It's still unclear how officials would choose which Floridians will qualify—perhaps by first-come, first-served basis, by lottery, by financial need. But making it fair will be difficult, Ashford said.

"It's going to be sort of a gold rush race to get to the pot of gold," Ashford said.

Barring some other action, the rest will continue as they have been. If the money runs out early, experts said officials will have to find more cash, scale back benefits or drop the number covered.

Many other key questions remain unanswered until the U.S. Department of Health and Human Services completes rules for the program:

Will the rules be done by June 23, the law's deadline for the program to start? Will it accept people with partial coverage that excludes their illnesses? Will it take people with coverage but paying huge premiums? What are the maximum premiums? Can the program come together fast enough to let people start buying coverage on Aug. 1, which is an unofficial target date?

Despite the flaws and uncertainties, officials said the pools are worth doing.

"That's 30,000 people who weren't covered before, and that's a good thing," said Laura Goodhue, executive director of Florida Community Health Action Information Network. "I guess the message is help is on the way. We wish state or federal officials could do more."

Plantation accountant Alan Scharf doubts he will be eligible because he's insured at the moment. He has COBRA insurance at $339 a month from a past job with a company. But it's about to run out and because he had prostate cancer two years ago, he said he will have to pay at least $900 a month for a worse policy.

It's unclear who will run the pool in Florida. The state and 18 others declined to run their own pools and will let HHS run it or choose a carrier to do it.

Florida had its own high-risk pool starting in 1982 that covered as many as 7,000, but it collapsed under huge medical costs of the sick people who enrolled, said Randy Kammer, vice president of regulatory affairs and public policy for Blue Cross Blue Shield of Florida.

The state put no money into the pool and premiums paid by patients covered only a fraction of the costs, Kammer said. Fees paid by insurers covered therest, but when the losses reached tens of millions a year, legislators agreed to close the program to new people in 1991. Today, only 250 people are still covered, the smallest state-run pool in the nation.

Thirty-three other states are using pools to insure 200,000 chronically ill people, which is why health reform planners borrowed the idea.

Kammer said the new pools will have lower premiums than the older state pools. That will mean higher losses but better coverage for the chronically ill.

Who might benefit? Maybe Laura Gelber, 57, a Hollywood real estate agent who works at a lunch counter to make ends meet.

Gelber said she can barely afford $1,100 a month—with a $10,000 deductible—she now pays for a policy through a former employer for her family of four. The price is high because her husband has diabetes and her college-student son has a gastrointestinal condition. The policy expires this month, and Gelber said the only policies available would cost $3,000 a month.

Like Fladell, she is skeptical the new high-risk pools would be affordable: "You will be able to get coverage. You will pay through the nose for the coverage, but you will not be shut out for coverage."